Experts React: Energy Policy in the Reconciliation Debate

A Vote of Confidence for LNG

Joseph Majkut, Director, Energy Security and Climate Change Program

The Trump administration has moved swiftly to approve permits for new liquified natural gas (LNG) export facilities, emphasizing their significance as a leading U.S. export and cornerstone of energy dominance. Now, House Republicans are proposing to make export permits for projects serving non–free trade agreement (FTA) countries almost immediately available upon payment of a $1 million fee. This represents a potentially enormous shift in U.S. energy policy and signals growing confidence in the United States’ energy dominance.

Under the Natural Gas Act, every facility exporting to non-FTA countries must be approved based on it serving the national interest. To evaluate that criterion, the Department of Energy (DOE) has studied how new exports might affect domestic gas prices, energy security, and emissions. Last year’s debate over the temporary pause in new licenses and the DOE’s concurrent study was a procedural structure around a much more fundamental debate: Was the United States ready to be a leading exporter in the global LNG market?

Should this new fee-based scheme come into effect, the answer will be yes. Such a permissive policy would indicate that U.S. policymakers see a bright future for U.S. LNG exports. It would demonstrate confidence in the ability of domestic producers to meet increasing demand domestically and abroad and let the market drive investment decisions more directly. The United States would be affirmatively, and more fundamentally, an exporter.